Pension schemes cut investment in securities on Covid-19 disruptions, blunting local investor stake in the economy and making Kenya slip four positions in an index that ranks countries’ financial market attractiveness.

The Absa Africa Financial Markets Index 2021 shows that reduced pension investment saw Kenya lost 17 points in the index that measures local investor capacity.

The country scored 24 points out of 100, from 41 in 2020.

The local investor capacity was based on the size of pension funds – key domestic market participants – and its potential to drive market activity through investment in the securities market.

The report shows Kenya’s percentage of pension fund assets in listed securities has dropped compared to 2020 against countries like Namibia, Uganda, Cameroon, and Nigeria whose investment in the local market jumped.

The shrink in Kenya’s pension assets position saw the country’s overall score drop to 47 from 58.

The country dropped four places as the most attractive financial market in Africa to 11 from 7 in 2020.

The report also assessed progress in other five areas: market depth, access to foreign exchange, market transparency, tax and regulatory environment, macroeconomic opportunity, and enforceability of standard master agreements.

The survey has attributed the drop in scores to disruptions in member contributions and policy cancellations witnessed from last year.

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